Beating the Market: Surprise, Surprise, the Monkeys Win!

???A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.???

–Burt Malkiel, ???A Random Walk Down Wall Street???

On the first day of my ???Financial Economics??? class at Chapman University, I ask the students to pick one single stock that they think will perform the best. Then, in the spirit of Burton Malkiel???s textbook, ???A Random Walk Down Wall Street,??? the students individually throw a dart at a page containing a list of 1,000 stocks published in the Wall Street Journal.  Whatever stock they hit is included in a ???dart stock portfolio.???

At the end of the Spring semester three months later, I average the return of all the stock picks by the students and then by the darts to see if these two portfolios can beat the overall market index. We just finished the Spring semester, and guess who won?

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